Stock-Based Compensation

12 Months Ended

Dec. 31, 2025

Share-Based Payment Arrangement [Abstract]

Equity Incentive Plans

In July 2021, our board of directors adopted and our stockholders approved the 2021 Equity Incentive Plan (“2021 Plan”) that became effective on July 22, 2021. We reserved 5,200,000 shares of common stock for issuance under the 2021 Plan. In addition, 934,562 shares available for issuance under the 2013 Equity Incentive Plan, adopted in 2013 and amended and restated in 2019, were transferred into the 2021 Plan. In addition, any shares subject to awards under the 2013 Plan that terminate, expire, or lapse for any reason without the delivery of shares, or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price, will be added to the 2021 Plan. The 2021 Plan also provides that the number of shares initially reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and ending on January 1, 2031, by an amount equal to the lesser of (i) 5% of the shares of common stock outstanding on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares of stock as determined by our board of directors. No more than 56,000,000 shares of stock may be issued upon the exercise of incentive stock options under the 2021 Plan. Options under the 2021 Plan may be granted for periods of up to 10 years at exercise prices no less than the fair market value of our common stock on the date of grant; provided, however, that the exercise price of an incentive stock option granted to a 10% stockholder may not be less than 110% of the fair market value of the shares on the date of grant and such option may not be exercisable after the expiration of five years from the date of grant. The grant date fair market value of all awards made under the 2021 Plan and all cash compensation paid by us to any non-employee director for services as a director in any fiscal year may not exceed $750,000, increased to $1,000,000 in the fiscal year of their initial service as a non-employee director. As of December 31, 2025, we had 9,192,963 shares available for issuance under the 2021 Plan.

Stock Options

The following table summarizes stock option activity, including PBSOs, under our equity incentive plans for the year ended December 31, 2025:


	Stock Options and PBSOs	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands) (1)

Outstanding at December 31, 2023	9,410,404	$	8.03	8.0	$	6,432
Options granted	3,593,852	$	5.90
Options exercised	(182,217)	$	3.39
Options cancelled or forfeited	(2,039,936)	$	7.61
Outstanding at December 31, 2024	10,782,103	$	7.47	7.7	$	18
Options granted	4,645,853	$	1.59
Options exercised	(15,000)	$	0.40
Options cancelled or forfeited	(2,901,884)	$	6.65
Outstanding at December 31, 2025	12,511,072	$	5.49	7.6	$	466
Exercisable at December 31, 2025	6,565,291	$	7.69	6.5	$	45
Vested and expected to vest at December 31, 2025	12,511,072	$	5.49	7.6	$	466

(1) The aggregate intrinsic value is calculated as the difference between the stock option exercise price and the estimated fair value of the underlying common stock at the end of each reporting period referenced above.

Grant Date Fair Value of Stock Options

During the year ended December 31, 2025, we granted 3,553,688 stock options under the 2021 Plan to employees with a weighted-average grant date fair value of $1.08.

During the year ended December 31, 2024, we granted 3,593,852 stock options under the 2021 Plan to employees with a weighted-average grant date fair value of $4.04.

We estimated the fair value of each employee stock option award on the grant date using the Black-Scholes option-pricing model based on the following assumptions:


	Years Ended December 31,
	2025	2024
Volatility	86.1% to 89.9%	75.3% to 75.9%
Expected term (in years)	5.0 to 6.0	5.0 to 6.0
Risk-free interest rate	3.8% to 4.6%	3.7% to 4.5%
Expected dividend yield	0.0%	0.0%

As of December 31, 2025, there was $10.4 million of unrecognized stock-based compensation expense related to employee stock options that is expected to be recognized over a weighted-average period of 2.4 years.

Grant Date Fair Value of PBSOs

On July 21, 2025, we granted 1,092,165 PBSOs under the 2021 Plan to each of our officers with a weighted average grant date fair value of $1.00 per PBSO. We estimated the fair value of each PBSO on the grant date using the Black-Scholes option-pricing model based on a volatility of 88.7%, expected term of 1.9 years, risk-free interest rate of 3.9%, and expected dividend yield of 0.0%. Vesting of the PBSOs is conditioned on achievement of certain clinical development milestones during a two-year performance period ending June 30, 2027, and contingent on each executive officer’s continued employment on the vesting dates. As of December 31, 2025, there were 1,092,165 PBSOs outstanding with a weighted average grant date fair value of $1.00. As of December 31, 2025, we have concluded that it is not yet deemed probable, as required by ASC Topic 718 Compensation - Stock Compensation, that the clinical milestones will be achieved, and as such, no stock-based compensation expense has been recorded for PBSOs. As of December 31, 2025, there was $1.1 million of unrecognized stock-based compensation expense related to PBSOs, which will be recognized if the conditions for achievement of the milestones are probable.

Restricted Stock Units

During the year ended December 31, 2025, we granted 1,943,585 RSUs and no PSUs under the 2021 Plan. A summary of the status of and change in unvested RSUs and PSUs as of December 31, 2025 was as follows:


	Number of Shares Underlying Outstanding RSUs and PSUs	Weighted-Average Grant Date Fair Value per RSU and PSU
Unvested, January 1, 2024	205,357	$	8.49
Granted	1,410,242	5.53
Vested	(66,173)	10.07
Forfeited	(252,099)	7.60
Unvested, December 31, 2024	1,297,327	$	5.37
Granted	1,943,585	1.65
Vested	(468,489)	5.01
Forfeited	(599,189)	3.12
Unvested, December 31, 2025	2,173,234	$	2.74

On August 22, 2022, we granted PSUs to our executive officers, which would have vested contingent upon the achievement of a clinical milestone for our vispa-cel product candidate during a performance period ending December 31, 2024, and the executive officer’s continued employment during the performance period. As of December 31, 2024, the clinical milestone was not met and none of these PSUs had vested. No stock-based compensation expense was recorded on these awards. There were no PSUs outstanding as of December 31, 2025.

As of December 31, 2025, the total unrecognized stock-based compensation expense related to unvested RSUs was $4.5 million, which is expected to be recognized over the remaining weighted-average vesting period of 2.5 years.

Employee Stock Purchase Plan

In July 2021, our board of directors adopted and our stockholders approved the ESPP, which became effective on July 22, 2021. The ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended (“Tax Code”). We reserved 511,000 shares of our common stock for employee purchases under the ESPP. The number of shares of common stock reserved for issuance under the ESPP will be automatically increased each January 1, beginning on January 1, 2022 and ending on January 1, 2031 by an amount equal to the lesser of (i) 1.00% of the shares of common stock outstanding on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares of stock as determined by our board of directors; provided that the maximum number of shares that may be issued under the ESPP is 10,000,000 shares. The ESPP allows an eligible employee to purchase shares of our common stock at a discount through payroll deductions of up to 15% of the employee’s eligible compensation. At the end of each purchase period, employees are able to purchase shares at 85% of the lower of the fair market value of our common stock at the beginning of the offering period or at the end of each applicable offering period. We issued 1,106,141 shares of common stock under the ESPP as of December 31, 2025. We recorded $0.4 million in accrued liabilities related to contributions withheld as of December 31, 2025, and 2024.

Stock-Based Compensation Expense

We recorded stock-based compensation expense related to employee equity-based awards grants as follows (in thousands):


	Years Ended December 31,
	2025		2024
Research and development	$	5,406	$	6,920
General and administrative	7,274		9,786
Total	$	12,680	$	16,706

The above stock-based compensation expense related to the following equity-based awards (in thousands):


	Years Ended December 31,
	2025		2024
Stock options	$	10,208	$	14,193
RSUs	1,988		2,091
ESPP	484		422
Total	$	12,680	$	16,706

Caribou Biosciences, Inc. 10-K